Under the new deal Clearwire will receive at least $1 billion from Sprint in 2011 and 2012. The minimum 4G usage commitment for this year is $300 million and $550 million next year. Sprint will pay $175 million in pre-payment for the service that will be used later this year and beyond.

The companies also worked out an agreement for devices that use both Sprint's 3G network and Clearwire's 4G WiMax network. The deal is meant to align "the interests of both companies to enable growth for customers using smart phones and dual-mode devices."

The companies will also be allowed to resell each other's 3G and 4G services to other parties.

Building a new network is not cheap, and Clearwire has struggled to come up with the cash to finish building its network. The stalemate in negotiations between it and Sprint over the roaming agreement called into question how Clearwire would continue to pay for its new network.

The deal now clears up some of that uncertainty.

Still, there are rumors floating around based on a report from The Wall Street Journal this morning that Sprint is close to signing a deal with a new wholesale player called LightSquared. Like Clearwire, LightSquared is building a new 4G network. It is using LTE, the same technology that Verizon Wireless and AT&T are using for their 4G networks, instead of WiMax. And unlike Clearwire, which also competes with Sprint by selling a commercial 4G service directly to consumers, LightSquared will only sell access to its network on a wholesale basis.

The Journal reported that in the proposed deal LightSquared would get access to Sprint's network and spectrum as it builds its nationwide LTE network. In exchange, Sprint will get paid some cash, but will also get access to LightSquared's network.

The benefit of using LightSquared's network is that it will give Sprint a wider footprint particularly in remote and rural locations. Today Sprint must pay competitor Verizon Wireless for roaming. This deal could let Sprint cut back on its roaming deals with Verizon.

About the author

Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie.
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